In House floor remarks on Thursday, Rep. David Schweikert (R-AZ) sounded the alarm about debt and deficits.
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00:00the United States. Under the Speaker's announcement policy January 3rd, 2025,
00:10the gentleman from Arizona, Mr. Schweikert, is now recognized for 60
00:16minutes as the designee of the majority leader. Thank you, Mr. Speaker pro tem.
00:22And as always, I apologize to the board staff who I will try not to speak like a
00:28machine gun. Mr. Speaker, we're going to do basically three things. I'm going to
00:35make fun of us. I'm going to actually walk through some debt deficit numbers,
00:42interest, those things that are scaring my economist, myself, half to death. And then
00:49I'm going to touch on some of the, and it's a technical economics term, the
00:56bedwetting in regards to the reconciliation budget and how people are making things
01:02up. So let's, let's have at it. I, because I sit in an airplane 10 hours a week and I
01:09have some weird reading habits, I actually came across a paper written last year,
01:15published just recently. It's in natural, excuse me, nature, human behavior. So one
01:21of those quirky, excuse me, those academic, but it actually, what they did is they went
01:27back to the late 1800s and they took all of our congressional speeches up till 2022 and
01:36they ran a data set on them. They ran AI. And could you believe, Mr. Speaker, can you
01:44believe it? They figured out that our congressional speeches have become less and less and
01:51less based in facts. I know this is hard for us to believe, but apparently the quality of
02:02idiots, I mean, people like me getting up in front of these mics and doing presentations
02:08and walking through our job has crashed in quality, in facts. Matter of fact, they use the
02:17word intuition. I basically say we make public policy now by our feelings because God forbid,
02:27we go to our voters and tell them the truth about the math. So it made me feel better because
02:34I have mocked us for years about how much of the way public policy we now make on feelings
02:41because it's great television. It gets you followers on social media. You get a hit on cable
02:46television tonight if you're willing to make crap up but do it with passion and feelings.
02:54But if you actually want to talk about the math of what's going on in this country, it turns
03:00out it's how we're rewarded now as elected officials. Now, what was interesting is they had the curve
03:07actually starting to fall in 1970 and it's just gotten steeper. So part of it and part of
03:14my conclusion is television, then moving to cable news, and then moving to social media,
03:22we have crashed the diet of robust facts in our speeches. So now that we're going to make
03:31fun of ourselves, let's go on to the next thing. Mr. Speaker, and for anyone that asks,
03:35we've been running the current data on how much we're borrowing. What would you guess we borrow
03:42per second right now? Where right now it looks like we're burning $72,000 every second. We're
03:51borrowing $72,000 every second. My best guess right now is we will borrow 7.37 percent of
04:04the entire economy this year. And try to keep that number in your head because we're going
04:10to come back to that in some charts and explain why that's so devastating. It's like we just
04:16don't care about people's retirement, our kids, the next generation, and how the hell
04:22they're going to actually cover any of the scale of debt. And then we lie about what drives
04:27the debt. And Mr. Speaker, our best guess is we go from that $72,000 a second this year
04:39to maybe about $82,000 a second next year. And this is hard for people to want to accept,
04:49but it's the math. Over the next 10 years, the baseline borrowing was about $22 trillion.
04:57Now we have what we're trying to do in figuring out how to extend the expiring tax provisions.
05:03We have the requests from the White House. We have other, you know, disasters, other things
05:07we're trying to cover. We're basically right now looking at, and I'm going to show this multiple
05:14times. United States, what it took us from the day we were elected, Mr. Speaker, how much
05:21debt? We will double it. We will double 240 years of borrowing in this 10-year period.
05:32The majority of that borrowing over the next 10 years is interest and Medicare. But God forbid,
05:39you know, we're not allowed to tell people the truth. Most of the debt, debts, deficits,
05:47and demographics is the fact we got old. We stopped having children. We have a shortage
05:55of young people in the country. And we're terrified to tell our brothers and sisters the
06:01truth about the math. So let's have at it. For anyone out there that's paying any attention,
06:08and this number actually probably right now is a little bit worse. We now think it's actually
06:11about 75 percent of federal spending is on autopilot. So you become a member of Congress.
06:18What you get to vote on, everything is borrowed. When you vote on non-defense discretionary,
06:22when you vote on defense, every dime of that's borrowed. And about 400 billion of what is mandatory
06:29spending, which means formulaic. You work so many quarters, you get your benefits. You served
06:35in the military. You get your benefits. You're part of a certain tribal group, part of our
06:38treaty obligation. You have certain things coming to you. But the things we vote on and
06:44the things we try to balance the budget over, okay, well, we need more money for defense.
06:48We have threats in the world. Okay. You get down to we're trying to balance the budget
06:54on about 13 percent of our spending because we're terrified to talk about everything else.
06:59You can't touch interest. I'm going to show you a slide here in a moment. This one should
07:05scare the crap out of people. And I know my language is becoming more and more inflammatory,
07:12but I can't seem to break through. This is from something called Moody's Analytics. Okay,
07:19it's one of those fancy subscription services. They have a bunch of economists. They collect data.
07:25They have us. In nine budget years, 30 percent of U.S. tax collections go just to interest.
07:39So you pay your dollar in taxes, 30 cents of that in 2035, go just for interest. Does that
07:51not scare anyone? When the interest growth is bigger than everything we're talking about
07:58and trying to say, by multiples, by multiples. We calculate this year, this fiscal year, one
08:06we're living in right this second, we can spend a trillion one, trillion two in just interest.
08:17There's a data set that if we do some of the things, if we were to do the Senate's reconciliation
08:21budget with almost none of the pay-fors, in 10 years, interest could be a couple trillion
08:29dollars a year. The annual deficit will be three-plus trillion a year. We're probably going
08:36to be, what, 2.3 this year. Last year, for every dollar we took in in tax collections.
08:50Take a guess. What did we actually spend? Took a dollar in in tax collections last year.
08:55What did we spend? We spent a dollar thirty-nine. We take in a dollar, we spent a dollar thirty-nine.
09:04This year was supposed to be better. We were only going to spend, I think, a dollar thirty-six.
09:10I mean, it was supposed to get slightly. We have a small problem. With some of the GDP growth
09:17numbers, just that adjustment, we may have just lost two hundred billion dollars in tax
09:22receipts in this fiscal year, you know, into September, between now and then. It just shows
09:30you how fragile we are when small movements of interest, you know, when you have to refinance
09:37nine trillion. Thank you for hanging out with us. Welcome back. But think about this. A single
09:48point of interest on U.S. debt, and it takes years for it to roll in because of how much
09:52we have to refinance. So we'll take about nine trillion to market this year and refinance.
09:58We'll issue a couple trillion new this year. A single point of interest over ten years cost
10:04you three trillion dollars. Why does this not scare the crap? Why do we not have people
10:12coming behind these microphones? But we're better off getting behind these microphones
10:16and telling passionate stories, antidotes, those things, because that's what gets us
10:21on social media. That's what gets people's dopamine hitting. But at some point, the math
10:27is going to win. And when we have the really smart analytic firms coming and saying they're
10:39scared about U.S. sovereign debt, you see things happening around the world that make me very
10:45nervous, the appetite for going on the long end of the curve. Look, United States sells very
10:51short-term debt, and then we have two years and five years and ten years and twenty years
10:57and thirties. But we're having real trouble selling the debt on the long end of the curve.
11:03And do not pay attention to some of the debt markets over the last month or two. You want
11:08to know why? Because we're in extraordinary measures. We're up against the debt ceiling. We're
11:13not issuing new debt. We're only issuing refinance. And what comes due within the cap? What happens
11:21a couple months from now when we all raise the debt ceiling? And I love the brain trust
11:29that goes, don't raise the debt ceiling. Did I just mention last year for every dollar
11:33we took it and we spent a dollar thirty-nine? Just tell me what thirty-nine percent of the federal
11:40spending you want us to stop doing. Because when you don't raise the debt ceiling, we've
11:45got to end all that. So more than a third of all of our spending is functionally borrowed.
11:50Just tell me, happy to do it, just tell me which third you want us to stop financing.
11:56And those are the very people filling up these hallways demanding we give them more money.
12:05What happens when we raise that debt ceiling, Mr. Speaker, and we have to come to market,
12:11Treasury has to come to market with five, six hundred billion dollars in functioning to
12:17catch up, refund all the accounts they've been borrowing from. That's what you do in extraordinary
12:21measures. You grab every account, use that cash now, you've got to refund it. And you take
12:26that much to market. We have one analyst who's saying you will see a pop in U.S. interest rates
12:33maybe on the ten-year hitting five. Just boom! Because suddenly you're grabbing so much of
12:39the world's capital to finance what we've been borrowing internally that now we've got to pay back.
12:44So just be prepared.
12:49These aren't surprises. We all know it. But no one reads the damn documents.
12:57Because it's math. And it turns out telling the truth, remember our story here, that fact-based
13:03discussions on this floor no longer get you elected, no longer are listened to, no one cares
13:09about, just make things up, because feelings is now how we make legislation.
13:15And this board is almost a year old, but it was to try to make a point to our brothers and sisters,
13:26particularly on the left, that keep coming to us, just tax rich people more. And you show them — and we're
13:34going to show this slide here, but I'm going to probably have to say it two or three times so it sinks in.
13:39We have a report, detailed report, that sort of walks through every tax hike the left has proposed.
13:45And look, we're guilty on our side, every cut we've actually proposed. But you take every
13:52tax hike, and then you do the economic data on it, and you get about 1.5 percent of GDP.
13:58Okay, our cuts come out to about 1 percent of GDP. If I can do that math, that's 2.5 percent.
14:06Do you remember in the beginning of this? We're borrowing 7.3.
14:10So the next time you get a politician saying, well, just raise taxes on rich people,
14:17and then you show them that it's a fraction of a fraction of what we even borrow every single day.
14:25Great rhetorical use of language, horrible math, completely fraudulent math.
14:33Remember, it's demographics. But we're not allowed to tell people that,
14:37because it means we as a society have to do hard things. So look, I have this chart here,
14:42and I was just trying to make a point. How Washington finances 366 days of spending in 2024.
14:49The top 20 percent of earners covered 201 days. The next quartile down, the next 20 percent,
14:55covered 41 days. The middle earners, so the middle 20 percent, they paid for 17 days of government spending.
15:02The bottom 40 percent pay for 4 days of government spending. And then 103 days we finance by just borrowing it.
15:15We have, I think we're, we are now tied for the most progressive income tax system in the industrialized world.
15:25When we redid, when we modernized the tax code in 2017, the United States income tax system actually became more progressive.
15:38But yet, how many times have you heard members around say, well, they gave money to the rich.
15:43The rich after 2017 were paying more of the federal income taxes.
15:51At some point, we're going to have to have this really uncomfortable discussion.
15:55Is it on the tax side or the spending side?
15:58Because I've, I've done entire presentations here on the floor where I've shown you,
16:02go back the last 65, 75 years. Here's a time of very high marginal tax rates.
16:07Eh, we take in about mid 17 percent of the economy in tax collections. Very low marginal tax rates.
16:14We take in about mid 17 percent of federal taxes. It's, it's sort of, you go up, the actual economy slows down,
16:23this is what you take in. So the secret is, how do you adopt regulation and modernize it? How do you adopt
16:32tax policy that incentivizes productivity? How do you do the whole thing and get them to interact?
16:41So you maximize economic growth and that growth becomes your tax collection stability and gets you
16:49to the top of the total dollar amounts. But you're probably going to still constantly fall back into
16:53that mean of the percentage of the economy. So have a bigger economy. It's not that complicated.
17:02But you, you, you constantly, you know, so upper income taxpayers overwhelmingly finance the federal
17:10government. Okay, I know this isn't good politics. People like me are supposed to say, yeah, the rich
17:16need to pay their fair share. Okay, top 25 percent, excuse me, the top 20 percent of earners pay 25.2 percent.
17:26The next quartile pays 15.8 percent. The middle covers 11 percent. The fourth quartile down, so, so the next one down,
17:36covers 5.5. Bottom 20 percent of income earners, we send them money.
17:46Remember, we have sort of this negative income tax system, earned income tax credit, those things. So if you're in the 20 percent, the bottom
17:52quartile, we send you money. Matter of fact, we have a whole day — I didn't bring the chart — that shows
17:57functionally for in America, if you're in the bottom half of income earners. Look, post-inflation,
18:05your life is miserable because wages haven't gone up as fast as inflation did. But that inflation was
18:12substantially created by stupid policies from the previous White House. And the Democrats, who spent like
18:19raising, we financed, we dumped that much cash into society, you set off inflation. It's your high
18:24school economics class. And here we are a couple years later, and the poor are still poor because we
18:30still haven't gotten wages growing faster yet. And what scares the crap out of me is I'm now seeing
18:36some data saying we may have a year where inflation could be hovering around 4 percent by the end of the
18:41year. We've got to do policies to get those wages growing. But I have a chart that will show you the
18:50bottom 50 percent pay about 4 percent of the income tax, but the bottom third actually get money. And in
19:02some ways that's just being compassionate. But we have the data from post-2017 when we did tax reform,
19:11when we had the miracle of income equality starting to really shrink. We had three years there where
19:18the poor were getting dramatically less poor. Why isn't that moral? Why isn't a good regulatory policy,
19:26good tax policy maximizes that velocity? So let's really annoy some of our leftist brothers and sisters.
19:39This is a — there's an article on the Manhattan Institute written by, I believe, Jessica Riedel.
19:49It's now about a year, year and a half old. But what they did is they went through basically all the
19:55proposals the left has on raising taxes. And step by step did the — here's the tax raise, here's the
20:03economic effects, here's what you actually take in. Remember our rules about size of the economy,
20:0817.1 or mid-17 percent of the GDP. Individual income tax, investment tax, raising the corporate taxes,
20:18raising the state taxes — when you got to the end, you functionally were getting about 1.5 percent
20:24of new tax receipts for the economy. Okay. All right. I look forward to the Democrats,
20:36you know, actually proposing this and actually being willing to vote on it. Because they
20:40they throw these things out, they get them scored, they controlled everything here a year ago — well,
20:46a couple years ago — do you notice they never did them? But pretending this solves the problem.
20:54So you get 1.5 percent, you will have stagnated the economy. You already hear the discussions of
21:01how close are you to stagflation, which is partially driven because of the economics.
21:05And remember, at the end of the decade or with 9 years or so, 22, 23 percent of the population is 65
21:12and up. We have a demographic issue for productivity. The point of showing this chart
21:19is the solutions you will hear if, God forbid, you go on left-wing cable television, sometimes even
21:26right-wing, they're mathematical lies. We're borrowing 7.3 percent of the economy this year.
21:44Are we willing to engage in a revolution of using technology,
21:48modernization? How many businesses still run themselves as if it's still the 1990s? Government
22:01does. I had someone bring me just the other day a health piece of health care paperwork — I think
22:08it might have been from the Indian Health Services — it was three-part NCR paper for a purchase order
22:14for a health care procedure — that you fill out. And I think you faxed it in.
22:21Have we lost our minds yet? You get protesters from the left saying, don't use technology.
22:28You've seen the article after article of the five major databases the United States have. None of them
22:34talk to each other. If you're willing to actually read, you saw the stories of small business
22:43administration having — what was it — 3,300 people that had taken out loans, except the small
22:50problem is all of them were 114 years and up, meaning they were onto their rewards. They weren't with us
22:58anymore. Turns out those $300 million in loans had no one had paid a dime back, but the small business
23:05administration didn't have the ability to bounce off the Social Security mortality or death file.
23:10We've designed these walls to functionally — it's as if the fraudsters designed our data systems here
23:18in the federal government. Let's go fill out things. Let's go get money. Let's steal the taxpayers' money,
23:25but we're going to make sure that there's no way to check the data that's being filled out because
23:30we want to protect the privacy. Some of that's not privacy. You're asking for a government-insured loan
23:34over here, and you can't check the death file? What idiots allow this to happen? And yet you get
23:44protesters in front of your congressional offices saying, don't let Doge and Doge actually make the
23:50system work. I'm sorry you're scared of change. Did I mention to you we borrow $72,000 a second?
24:00How do you convince our brothers and sisters across the country — we as members of Congress,
24:08the administration, the bureaucracy are taking it seriously — if you're not even willing to make
24:13the data talk to each other? And so back to one of the things that has just annoyed the crap out of me.
24:21I used this board a handful of times for some of my left-wing protesters the last couple weeks,
24:29and to the credit, some of them were actually shockingly intellectually honest saying,
24:33oh, that's not part of our talking notes. No one told them the truth. Guys, it's on the internet.
24:41Trust me, I'm not that bright. I just looked it up. It's there. You can find it.
24:45But the baseline of the next 10 years, we were going to spend — the federal government baseline
24:53was spending $86 trillion over the next 10 years. $86 trillion.
25:03All we're talking about in trying to modernize and change spending in this reconciliation budget,
25:10if you did the high-end — so the house full all-in high-end, which please, God, let us get there — but
25:17the high-end is $2 trillion. $86 trillion. We're trying to get two. That's 2.3 percent.
25:28And that's creating the bedwetting.
25:30Do they really love their money, their spending?
25:39But remember, when you — if you don't want tax hikes — I don't want tax hikes. Borrowing is a tax hike.
25:48It's just paid for in the future with interest. Stop thinking borrowing is free.
25:54I — my wife and I, we've adopted a couple kids. I have a two-and-a-half-year-old.
26:06We're incredibly blessed. It looks like he's going to be fine. He's going to be normal.
26:11He's absolutely a joy. When he's 22 or so, just to maintain baseline spending in the United States,
26:20you have to double every single tax. That's the morality of this place.
26:27For the lobbyists, for the groups that are walking our halls saying,
26:31we want more spending, don't do this horrible, devastating 2 percent cut in spending over the
26:39next 10 years. Thank you for screwing over my two-year-old. Your absolute immorality — if
26:47you're going to walk into our office and demand more spending, tell us what you think, where we
26:51can modernize, where we can change the cost of government. We've come here and done presentations
26:56that the single biggest expense we have in government — turns out it's obesity.
27:04We did a whole model for the last couple of years, huge amounts — you know, remember,
27:08I chaired the Joint Economic Committee, so I have like five PhD economists. We did the data,
27:129.1 trillion additional health care costs. Turns out the morality, if you'd help our brothers and
27:18sisters be healthier — but you've got to do through the Farm Bill, you've got to do through
27:21nutrition support — you're not going to have to decide, are we going to have access to glutides
27:26and other things, but are we going to use technology, the wearables, the other things? I have one of those
27:31data rings on. What would happen if one of the most powerful things you can do for U.S.
27:37sovereign debt stabilization is a healthier society? And somehow that becomes a fringe conversation
27:45around here because people make money off of our brothers and sisters being sick.
27:54It's actually perverse.
27:58If you actually go — I think it was a year or so ago, I think it was Goldman Sachs did this huge
28:03report on GLP-1s, blue tights, and somewhere one of the footnotes was sent to me, and it had this line,
28:11a couple lines, saying if there was wide adoption and the United States actually became much healthier,
28:18much less morbid obesity, that there would be health care systems that would go bankrupt because
28:23they wouldn't have enough multi-chronic sick people to pay their bonds.
28:26think about that.
28:35Everything's about the money here, not about the morality of having a society that's growing
28:40and prospering. Prosperity, I would argue, Mr. Speaker, is moral. How much of the crap we do here is not
28:48just satiating today's, you know, Twittersphere screaming at us, or something that's completely made
28:54up, but actually building a plan saying, here's the prosperity we're going to build for the future.
29:03Oh, sorry. I probably have already had too much coffee today.
29:09And this is just to make a point, and this is more to mock the Senate. And I was talking to
29:15one of the senators last night who also is concerned like I am. Maybe they hear our voices. So
29:21Tax Cut and Jobs Act, and these are just the base numbers when they were first scored. This number
29:26actually came in half that. No interest is attached to it. But we stole this from someone else, but it
29:32was to make a point. Democrats complained about that. CARES Act, we complained about the excess of
29:37spending. The American Rescue Plan, we complained about. Then you add in the Bipartisan Infrastructure
29:43Act. It wasn't that bipartisan. I think they had just a handful of Republicans who wanted projects
29:48in their districts. But you add it all up, all the things we have fretted over over the last decade,
29:54and they don't even add up to the amount of borrowing that's in the Senate reconciliation budget.
30:02Because it's so much easier here just to spend and just borrow it. There's this attitude here,
30:09give it to me now. Oh, you guys will figure out something in the future.
30:17And for anyone out there who's — look, I've actually — we've worked with some of the Doge
30:24folks because I have The Economist. But go on their official website right now.
30:30They think next year, 2026, fiscal year, we can save $160 billion. That's real money.
30:36But it's only if we borrow $6 billion a day, what, 24, 23 days of borrowing. That's everything we've gotten.
30:46There's this inability for members of Congress, our staff, the public to understand the scale,
30:54the scale of what we're up against.
31:01This basically just reiterates what I'm going to show a couple times here,
31:05just because I need it to sink in. If we do the Senate reconciliation budget with our baseline,
31:11we double U.S. debt in 10 years.
31:18I'm going to say it a couple times so it sinks in.
31:22Debt held by the public, and they're using 2034. We prefer to use 2035 because that's more of an honest
31:29budget window. But you start to look at what the Senate resolution — this was baseline debt.
31:38They add another 32.7 percent to the debt. And if we do what the Senate put out in their budget
31:46reconciliation, we functionally double publicly-held debt in the United States.
31:50What took us 240 years to do — bless us — we can do in 10. Because we're good at borrowing money,
31:58handing things out, telling people there's no consequences, making crap up, saying,
32:02it's — it's — it's — it's healthcare for illegals. Okay, shouldn't do that. But it's only a couple days
32:08of borrowing over a year. You've got to do lots and lots and lots of difficult things. And we've done
32:19entire presentations where we've shown you could revolutionize the cost of healthcare.
32:23We've actually looked at one data set, and we've been studying this now for months.
32:27If I came to you, Mr. Speaker, and said, just in Medicare, duplicative MRI scans, PET scans,
32:39X-rays, ultrasounds could be as much as $25 billion a year. Duplicative scans. What if you got your
32:48knee scanned and you just attach it to this thing so it's portable with you? That's a quarter trillion
32:54dollars over 10 years. Is that a cut? No. It's just a simple use of almost a free technology that's
33:05out there where you can load them on this and it's portable with you.
33:10We get lobbyists who don't like that idea because apparently they make money on the duplications.
33:16The inefficiencies, the frauds, those things are a business model now. When government controls
33:23functionally a quarter of all the spending in the United States, of all the GDP and a big chunk of
33:30that is functionally waste and fraud and misallocations, bad design, give it whatever
33:35anachronism you want or title you want. Many of the lobbyists that are walking these hallways are here
33:43to stop us from modernizing the system and bringing it into this century and just using the technology.
33:49You walk around with a supercomputer in your pocket. This could crash the price of healthcare,
33:55make you healthier, give you access, all these things. And there's an army of people trying to
34:02stop us. Remember, telehealth here was an absolute war. There were millions being spent to stop it
34:11because it screwed up people's business models.
34:13And I'm going to do this a couple more times and then we're going to do one more example.
34:23If we do what's being planned right now, you finish the next decade, well, 10 years from now,
34:32either $73.7 trillion of debt or our other chart actually gets it up to $74 trillion of debt.
34:47So when you hear a member on the Democrat side, Republican side running for office,
34:52I care about the debt. But I'm more afraid of telling you the truth of what drives the debt
35:02and the fact of the matter is the people walking the hallways here, often our own constituents,
35:12are screaming at us for more spending.
35:13Don't they have kids? Don't they even care about their own retirements?
35:23The absolute vacuousness of immorality. So I grabbed this from the Wall Street Journal.
35:32So I can't imagine anyone here has had protesters and people showing up in their office about
35:38Medicaid, which is supposed to be our safety net for indigents and the poor.
35:45I have some old experience with that. For a short time, I actually chaired
35:50the health care committee in the Arizona state legislature when I was a child.
35:56For a while, I actually worked on the access budgets, which is the Arizona Medicaid system.
36:01We do something unique. We functionally buy managed care HMO policies for our poor people.
36:06It's actually shockingly efficient. Matter of fact, if you took the rest of the country and adopted the
36:12Arizona model, you could save hundreds of billions of dollars over those 10 years.
36:17But the Wall Street Journal did us a favor. They actually took the Arizona system,
36:22which actually has a shockingly high satisfaction rate,
36:26good outcomes. We can make it much better. But the punchline here is they're showing something
36:32called a provider tax. This was a scam scheme. And I have to openly admit, on part of it, which was
36:41the disproportionate share, this is geeky stuff, I was actually part of managing that many years ago.
36:46You know, I was county treasurer. I managed money. And we were part of the swap. But part of the scam
36:52out there is raise the cost of health care, create a tax, capture that tax. And because you raise the price,
37:04you also capture more money from the federal government in their percentage match.
37:11What the Wall Street Journal did was brilliant. They just produced this chart that says,
37:15do you know the Arizona government, and this is most state governments, actually use this provider tax
37:25washing machine? They make money. They actually take in more money. They're not meeting their
37:32obligation of it was supposed to be a partnership. It was supposed to be a match.
37:38Is this a cut? It's just saying, look, there was a deal made in the late 60s that we were going to
37:45share some of the risk and some of the cost with our poor on providing health care. Then when Obama came
37:51in, they did this expansion and 90, 10 percent, even though it was going to people who were still
37:57work eligible and those things. But then states, and this, we all knew this was going on, but it was
38:05supposed to be temporary. It was supposed to be when coming out of a major recession, we were going to
38:10go back to normality. And instead, it's padding for state budgets. That cash isn't going into health
38:19care. It's financing everything and and raising the U.S. debt because this is borrowed money.
38:27Would the gentleman yield? Absolutely.
38:30I'm going to be having shared time on the time that I have after the gentleman from Arizona. I want to
38:34thank the gentleman from Arizona for his steadfast devotion to highlighting for the American people
38:39the state of our fiscal health, which is not good, and the extent to which we're complicit in it.
38:43And I want to just point out that this thing that the gentleman from Arizona is talking about
38:49is so central to everything we're trying to deal with right here, right now in Congress. And if we
38:54don't fix that, then we will have failed. I want to be clear to my Republican colleagues. If we do not
39:00fix this scheme, this scam, the gentleman didn't misspeak. It is a scam. If we don't fix that,
39:07we will have failed. Let me just ask the gentleman a couple of questions.
39:12Prior to the existence of Medicaid, right, there was no federal subsidy at all. This scheme
39:19couldn't have possibly existed in this way. Yeah. Most of this was designed late 60s.
39:25Right. My state only — I have this weird history. I was a child — excuse me, I was
39:32early 20s. I was a page at the state — a temporary page at the state legislature. Arizona was the
39:39last state to enter Medicaid. Right. It was bankrupting our counties, because up to that point
39:44in the early 80s, the counties were actually the provider of health care. Right. So we entered this,
39:50but we created a really crazy system saying we're going to do managed care to drive the price down. But
39:56yes. So Medicaid was created, and Medicaid was created to ostensibly provide an avenue for health
40:04care for the poor and vulnerable, right? It's a broad statement. Is that true? The actual language was
40:09for indigence. It was supposed — it was mostly for women and children. And it was supposed to then be
40:14a shared arrangement between the state and the federal government, correct? And in the early days,
40:19it was like a 50-50, not 100 percent coming from the federal government. And so now fast forward — fast
40:25forward — and the current vulnerable population — okay, what we call the vulnerable population — the
40:30indigent, the poor, those who need it — single moms, people who are sick, the frail — that population,
40:36even under today's law, gets a federal — we'll call it match — it's really a formula — a match of 50 to 70
40:45percent, depending on the jurisdiction. Is that correct? Yeah, it's — yeah, it blends out
40:48closer to the 70. And now talk about the expansion population. And so then now let's fast forward
40:55what we're really talking about. For everybody at home watching C-SPAN, all 14 of you, we have a
41:01situation where Obamacare expanded the Medicaid population, and it expanded it massively to a
41:09population that is much bigger and much more able-bodied, i.e. healthier. So now you would think,
41:16well, I don't know, is that good or bad? I have my problems with it facially. But even if you were
41:21going to do it, would you then say, as it does, that that population — that healthier, able-bodied
41:28population — should get 90 percent match from the federal government? Because that's what's happening.
41:34They get a 90 percent rate for that expanded population. Then layer on top of that — and this is
41:40and I'll yield back — this is what you're now dealing with. The gentleman's chart that the Wall
41:45Street Journal did, where you have the provider taxes, you have this high rate that they are able
41:51to collect, and they're juicing it using the provider taxes. They get this 90 percent federal
41:56dollars, and then they're openly — California, for example, has stated they are gaming the system to get
42:04federal dollars to use that to subsidize illegal aliens and to people who are not the vulnerable
42:11population and, frankly, to put it in their general budget. That's what the gentleman's talking about.
42:15That's the current state of affairs. I yield back to the gentleman's mayor.
42:18No, and Mr. Roy, it goes further. So as we all get the paid for — have you had the occasion yet,
42:25Mr. Speaker, Mr. Roy, where a group comes into your office, somehow they were put on a plane,
42:31put in a hotel, those things here. They have no understanding of the math, the math, the mechanics,
42:38but somehow there were Medicaid providers in your state that had plenty of cash laying around
42:45to fly people out to come lobby. And then — so we did this. We pulled open — here's another Wall
42:51Street Journal article from a week or two ago talking about how many in the Medicaid systems
42:58here in the United States are enrolled in multiple states. So you actually have billions and billions
43:06and billions of dollars here. They're enrolled in multiple states. And even the discussion of
43:12could we just match data? And you actually get objections to this because the fraud is part of
43:19the profit model. So for — I'm not — I'm on ways and means. This is something Energy and Commerce
43:27is going to — it gets to — is their primary jurisdiction as they're working through it.
43:31But if you just stack up the cheating,
43:37the date — the misuse of — the vacuousness, the absence of data to try to deal with the multiple
43:43enrollment of populations, if you actually start to stack these things up,
43:50how dare you call those cuts? How dare you? And why don't you care about the future of this
43:59government, the future of this society? We cannot handle the stacking of debt.
44:06Did I mention the $72,000 we borrow every second? And it only goes up — we have a model that says
44:18in the 10-year window, we're up somewhere in the mid-90s per second in borrowing.
44:27And we're terrified to tell the truth. Well, Mr. Roy, you may not want to be in the room for this one
44:33because this is the stuff that gets you attacked at home. But it's math. It's the truth. It's the CBO numbers.
44:41Rising Social Security and Medicare shortfalls nearly drive the entire 2019 to 2033 deficit.
44:48This board is a couple years old, but the facts are the facts.
44:55We're terrified to tell the public the truth. The primary driver of debt is demographics.
45:03Go to the CBO. And this board is actually today — we're waiting for the update, but we've done some
45:08back-of-the-board math. The math is much uglier because interest rates are up substantially
45:15from when we calculated this two years ago. But you functionally have a country that — so this one's
45:22from two years ago. The 30-year debt, we were going to borrow $124 trillion.
45:33If you remove Social Security and its finance costs, Medicare and its finance costs,
45:37the rest of the federal government actually grew slower than tax receipts.
45:43These numbers — and we'll probably have the update on this from CBO in the next couple months — with
45:53the higher interest rates, the higher running debt — we have models now that say, over the 30 years,
46:01we're going to be at 200 percent of debt to GDP. That that number is no longer $124 trillion,
46:12maybe $170 trillion of borrowing.
46:14So I don't know how many of you plan to still be alive over the next 30 years. Do you really think
46:23the world's financial markets are going to finance our debt?
46:26You have Ray Dalio, you know, the multi-billionaire hedge fund who's now retired, who's actually
46:37been coming here to Congress saying, warning, warning, the entire world's capital markets,
46:45because what China's borrowing, what Japan's borrowing, now Germany's going back into the debt
46:49markets, there's not enough capital in the world.
46:52When the United States is consuming 30 to 40 percent of all the money that goes to sovereigns,
47:01to governments, there's not — so what happens when there's a shortage of savings in the world
47:07to finance? Well, we can print money. Of course, that will set off inflation, so your life just
47:12becomes more miserable. And because so many of our benefits are all inflation index, you can't
47:18inflate yourself away from it because they go up. Or we can just pay the higher interest rates.
47:26Well, now, you already saw the beginning chart that Moody says in nine budget years,
47:3130 percent of our tax collections is interest. We have a model that shows a one percent increase
47:40in our refinancing. In 10 years, 45 percent of all U.S. tax collections. All of it is interest.
47:54Mr. Roy, Mr. Speaker,
47:56Mr. Speaker, you have members here running around saying, I need more money for SALT. I want actually
48:08more money for this program. I want more money for this. Okay, bring us ideas of how we modernize
48:17spending, how we can reduce costs by technology, by better systems, by a healthier society. But stop
48:24showing up at my door demanding more spending. There's no more money. The gentleman yelled for
48:30a question. Please. And I don't want to take away any of his thunder. No, no. It's because you
48:35actually just stopped me from cursing, so you did good. The question I have for the gentleman,
48:40when I first, when I graduated from law school at the University of Texas in 2003, the national debt
48:47was somewhere in the six trillion dollar range, six and a half trillion dollars. When I came to
48:52Congress, when I was campaigning to come to Congress, it was just over 20 trillion. That was 2018.
48:58Today, we are pushing 37 trillion. Is that roughly correct? Yeah. If you add in internally finance,
49:05Correct. The CBO says we will end this year at about 37 to my number is 37 three.
49:14So yeah. So now I bring that up because nobody at home understands that. You're doing a good job
49:21trying to put it in context, trying to explain it about the amount of money we're borrowing for
49:25family or taxpayer per second. But to put it in stark terms, what we're talking about with the debt
49:33and the deficits, what it really means is the inability to afford a house for the average American,
49:40right? Because the impact that flows from it is, as you alluded to, higher interest rates,
49:47a inability for the Fed and for Congress to continue to borrow and print money because of
49:53what you're describing worldwide. The ability to have people to buy our debt goes down. The cost of
49:59debt is going to go up. The interests are going up. Inflation is going up. And the average American
50:05family is going to take it on the chin. That's what we're talking about. And the reason I bring that
50:10up is because our colleagues, as you point out, run around here saying, ah, I need more money for the
50:17program. I need more money for fill in the blank. I need more money for Medicaid. I need more money for
50:21salt. Why? Because they feel like they've got a political interest in doing so. I'm sure the gentleman
50:28had like I did yesterday, the farm bureau coming into your office and needing help. Guess what?
50:34I understand why they need help because we, the federal government, have messed up their lives
50:38quite vociferously. We distort. And we distort. And so they want help. I get it. But then what do I do?
50:45Vote for food stamps. I'm a cancer survivor. You know that. And I have cancer groups coming in asking
50:50for money. I look at them and I say, well, can you go find some way to pay for it? And a lot of my
50:56colleagues don't want to do that. And I'll close with this. President Reagan had a great quote on the
51:02Johnny Carson show, a late night show in the seventies before he was president, in which he
51:08said, every program that a politician brings forward should have to come with a tax increase
51:15attached to it. Why is that? Was President Reagan pro tax increases? I know the gentleman from Arizona
51:21knows that not to be true. President Reagan believed in tax cuts and more money in the pockets of
51:25Americans to create wealth, to create economic growth. But why he said that was because we promise
51:32things we can't deliver. We promise things that we deliver that are fake because we're doling out
51:38money, printing money to pay for programs. And then on the other side of the ledger, we never want to say
51:45we need a tax increase to pay for it because we rightly understand tax increases constrain the economy.
51:51In other words, in short, we put ourselves in the box we've created.
51:59I yield to you.
52:02I want to try to they we use the term socialize. How do I get it part of our our folklore, our use of
52:09language? Borrowing money is a tax hike. Correct. You got to understand. Okay, you're not going to raise
52:15taxes. I despise raising taxes. I want as much velocity in the economy. A classic
52:21free market economist. Yep. But borrowing money is a tax hike. And it's a tax hike with interest on it.
52:29It's just to be paid at a future date. But because the curve is now steepening. Remember, I just showed
52:37you some charts that says we may double U.S. debt this decade. The curve is like this. You don't think
52:45we're not going to reach in and take some of your retirement. This is no longer about your grandkids.
52:51It's no longer about your kids. It's you.
52:58But I believe the political class has lied their backsides off for so long. Or we play this game.
53:03You will see some people on social media. You could save a million dollars doing this. Okay,
53:13you borrow a quarter billion dollars an hour. Yeah. 250 million dollars every hour is the borrow.
53:25Watch out for the scam artists who play the game. They give you something. It's outrageous. Okay,
53:29get rid of it. But sometimes the things we will debate for hours here are minutes or sometimes
53:37seconds of borrowing. But the big stuff, because there's so many lobbyists and constituencies that
53:45live off that money. You're not allowed to talk about that. And look, Mr. Roy, look, I'm blessed.
53:53I have Phoenix and Scottsdale. I have one of the best educated districts in America.
53:57I have a fairly prosperous. They tolerate me. They sometimes aren't happy with what I say.
54:03Yeah. But at least they know my math is good.
54:06And would the gentleman yield on that? One of the things that I've been saying in this building
54:10for the last several months is this debate about what we call, I think, somewhat wrongly and
54:14incorrectly mandatory spending, because it's not mandatory. We've just chosen to put it on autopilot.
54:19It's automatic spending. It's not really mandatory. That's a better name. And so I've been saying in this
54:23building repeatedly that the math has to math. The math has to add up. And is that, would the
54:29gentleman agree, the fundamental and core problem in this town when we're talking about the state of
54:35affairs? So for example, we in this process have taken Medicare off the table politically. The
54:42president has asked us to take Medicare off the table. We have taken Social Security off the table
54:46because by law, we are not allowed to touch Social Security in the reconciliation process. And then
54:51interest is off the table because you got to pay it. You can't just magically not pay the interest. So
54:56that adds up to what? About 47 percent of the total frigging budget. Half the budget.
55:02Yeah. And just to understand, in reconciliation, which is the one time we're allowed to talk about
55:07mandatory spending, the majority of mandatory spending we're not allowed to touch.
55:10Correct. Because if you're Social Security in the interest, that's probably 54, 55 percent of all mandatory.
55:18Sorry, it's a weird way I remember numbers.
55:21But I can give you — so let's actually — well, let's risk our political careers.
55:29How many of you have read the Wall Street Journal articles from the last year? I think they've done
55:33five or six major, major exposés on something we call Medicare Part C. It's the Medicare Advantage. It
55:41was the sort of managed care version within Medicare option that was developed by Republicans in 2005.
55:49One of their articles basically says they identified about 63 billion dollars of waste fraud misalignment
56:01a year. Right. A year. Right.
56:03A year. The MedPAC report — because I'm the only idiot who came here to the floor with the MedPAC,
56:10but that's — it's partially my responsibility being Waste and Means — the MedPAC report all highlighted,
56:14and we showed the MedPAC report. It says Medicare Advantage, the Part C, is coming in at 120 percent
56:23of fee-for-service. Just that delta from where it was supposed to be at 95 percent — I know there's a lot
56:29of numbers — when we designed Medicare Advantage long before you and I got here, it was supposed to
56:35come in at 95 percent of fee-for-service. That 25 percent delta is 100 billion a year. And if you do the curve,
56:46because of the growth of the program it's expected, that's a trillion and a half dollars over 10 years,
56:53just putting it back to what it was supposed to be. It's equal to everything we're talking about trying to
57:02reform in our reconciliation packages. How many conversations have we been willing to have
57:08saying, hey, you do realize we could modernize Medicare Advantage so the incentive for the providers
57:13is to have populations be healthier than running around and scoring them as sicker?
57:20Just align the incentives. I just found you a trillion dollars.
57:25Why can't we have conversations like this where we're trying to preserve
57:31the programs and the future at the same time?
57:34I — the gentleman was asking a rhetorical question.
57:39Yeah, no, and you don't have to answer that because — because the moment you answer,
57:43there will be an army of paid lobbyists, people running ads in your district, probably now beating
57:49the crap out of me on social media. Yeah.
57:51Because when it's that sort of money, you know they're going to — and you also saw the articles
57:56three weeks ago, Wall Street Journal, there's criminal investigations now going on. Justice
58:01Department now is diving into these folks. So there's more going on here. I will argue,
58:08Mr. Roy, and some of our friends who are fiscal conservatives but also want to modernize the delivery
58:14of services. Help me. We've spent almost a year diving into the data. What would happen if fixing
58:23these misalignments — the waste and fraud — actually, it doesn't get us where we need to be,
58:31but it starts moving us the right direction.
58:34Mr. Roy, I think I'm actually against my time, so I'm going to do that moment. I'm going to first
58:40apologize to the folks who had to try to take our words down for talking too fast, for the poor
58:46speaker that had to sit here and listen to this, and to my staff that's now going to have to write
58:54lots of apology letters for all the people who just hurt their feelings. But with that, Mr. Speaker,
58:58I yield back.